MARKETING STRATEGIES: What is your message?

If you think about the communication problem with potential customers, if we send out the wrong message, there is no reason to assume they will ever want to buy from us. We also have to put the right message in the right places in order to engage with our future customers.

Our first task is to get in front of them. If we don’t enter the conversation, we don’t get to play in the decision-making process. Therefore, the customer with the identified need has to find us in their information search. Alternatively, if we want to trigger the need, they somehow need to recognise that we have the potential solution when we come into their space. Having the right message is fundamental to the sales process.

Who is my customer?

From what we know of growth drivers in business, it is very hard to gain traction in a marketplace if you have a wide variety of customers with different needs all buying the same product or service. Also, given that different customers see their problems or needs differently or use the product or service in a different context, it is very hard to relate one customer experience to another.

Even so, there should be an agreement within the firm and with the external market as to who your target customer is. If you don’t know who your customer is then it is very hard to target them with the right message.

From a marketing perspective I want to know who they are, what their characteristics are, where they shop, why they buy, what triggers their purchase and what messages resonate with them. The more I know about my customer and their needs, the more targeted my messages can be. Also it allows me to direct my resources towards the best customers and not waste time and effort on those who are unlikely to buy.

Even with the same product, there may well be several applications for use and several different customer experiences. In that situation, it pays to group these so that a subset can be clearly defined and targeted. You can also decide which subgroups provide the best return for the effort expended to reach them. Separate websites could be used to better target the subgroups.

Many entrepreneurs I talk to cannot define their ideal customer. They have a description of their customer but when you dig deeper, you find it is too broad to be useful. Think of these:

• “We provide web development services to SME firms.”
• “We recruit senior management executives for large corporations.”
• “We develop technology for the aerospace industry.”
• “We provide productivity tools for professional services firms.”

But who is the customer and what do you do for them?

I like to challenge entrepreneurs with these questions:

• What type of customer would derive the maximum benefit from your products or services?
• Where do you have the best fit?
• When do you get the highest referrals?
• What type of customer makes the quickest decision to choose your product or service relative to your competitors?
• Where do you face the least resistance to the sale?

Sometimes there will be many potential customers but what we are seeking is the set of customers who derive the greatest benefit, are willing to pay the highest price or have the best fit. These are the customers where you will most likely have the greatest success. Also, it often demonstrates where you have the highest competitive advantage.

Example – complex equipment supply and installation

I spent several days with a firm in the US working with their senior management on a growth strategy. Initially, I had a real struggle to understand what they did as it seemed they did many things for many different types of customers. The range of equipment they supplied often varied and the size of the project went from a single piece of equipment to a large-scale, integrated set of equipment.

At one point, I was asked to look over a prospect list which had over 1,000 customer names. As the list was scrolled down, I asked the marketing director to estimate the probability of being successful. The success rate varied from 5% to 90%. After I had seen several of the 90% type, I asked them to describe, in detail, the common characteristics of the high probability prospects.

What transpired was enlightening, mostly to them. These prospects all required a fully integrated set of equipment. These jobs were complex and expensive but few competitors could deliver on this type of project. At the 5% end, there were lots of competitors and this firm had little to offer which could not be delivered by the competitors.

There were over 200 of the complex jobs in the list but it transpired that they only implemented about 20 of these per year. They had over 10 years of prospects in a situation where they had a 90% chance of closing the sale. I recommended that they discard the others, tighten up on their prospect definition and stick to the complex jobs.

What was missing was a very clear definition of the ideal customer. Just imagine how much wasted resources were going into marketing and sales efforts for low probability prospects.

With a better definition of the ideal customer – what would they need to do to work this definition across the entire firm so that everyone knew what the ideal customer looked like, what they purchased and what problem they were solving?

The problem of customer definition is often confused across a firm. If you ask multiple people across a firm to describe the “ideal customer”, you will be surprised how different the answers are. Even if you undertake the same exercise within the sales and marketing staff, you will almost certainly not gain a consensus. Clearly, if you don’t have agreement within your own business about what an ideal customer description is, then it is most likely that many of the interactions you are having externally will be misdirected. If the same people are preparing marketing and sales content or presenting to prospects, you will be dissipating energy chasing the less than ideal customer.

You might wish to undertake the same exercise with your suppliers, strategic partners and your professional advisors just to see how well the external world perceives your business. All these parties will in some way be promoting your products and services. If they have it wrong, they are directing a less than ideal customer to your door. 

Clearly you want to attract the right customer. If you define the problem you solve correctly and target the right customer, your conversion of leads to sales will increase dramatically. It also informs your development strategy so that innovations you are working on have the highest chance of improving your market position with your ideal customer sector.

Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia. A series of free eBooks for entrepreneurs and angel and VC investors can be found at his site here.